Market-based instruments for energy efficiency: a global review

Across the world, an increased uptake of the so-called market-based instruments (MBIs) for energy efficiency, such as energy efficiency obligations and auctions, can be witnessed. So far, a global assessment of those instruments is absent. In this paper, we analyse the most recent data across the world for all MBIs for energy efficiency. Whilst most of the 52 instruments identified can be found in the USA and in Europe, they are now operational on all continents. We estimate that globally around $26 billion of investment in energy efficiency is delivered through these instruments—this equates to more than 10% of the global annual investment in energy efficiency. There is considerable variation in costs among programmes. The available data show that expenditure by obligated parties and payments to auctions winners (programme costs) average around 0.013 USD/kW and are below the typical costs of producing a kWh in most sectors and locations.